Trading in bitcoin started off the year strong with a 30% rally, but it has fallen 15% from yesterday’s high of $995 to $848 after the announcement on Bitstamp.
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On December 5th the Chinese government banned banks in the country from doing transactions in Bitcoins and on the 16th they banned payment companies from doing business with Bitcoins. Chinese citizens that were interested in acquiring the currency found a way around the law, they bought Bitcoin certificates online on Taobao (China’s Ebay). But now this door may be closed as well. Taobao announced today that from January 14th, this practice will be forbidden. The effect is that this may decrease demand for Bitcoins in China considerably and possibly put more pressure downwards on its price.
From a technical point of view, we can find support for the currency around $830, but if it is broken it might reach $805 until it finds support again.
(Update – prices back up as BTC China announces its version of vouchers)